Currencies that are not backed by precious metals of equal value are called:
a. Legal tender.
b. "Trouble" – with a capital "T."
c. Near money.
d. Repurchase agreements.
e. Fiat money.
.E
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Crowding out is the tendency for increased government deficits to:
A. increase consumption spending. B. increase investment spending. C. reduce investment spending. D. reduce consumption spending.
If the average income of the consumers of Good A increased from $400 to $440, and the quantity demanded of Good A increased from 1,200 units to 1,300 units, then the income elasticity of demand for Good A is equal to:
a. 1.65. b. 1.16. c. 0.35. d. 0.84.
Suppose that the economy is operating below the full employment level of real GDP. If a liquidity trap exists, a(an) ________ policy would be most effective for solving the problem.
A. expansionary monetary policy B. contractionary fiscal policy C. expansionary fiscal policy D. contractionary monetary policy
Kauri’s country is building new factories to help increase the country’s production of woolen cloth. What is Kauri’s country investing in?
a. technology b. human capital c. natural resources d. physical capital